04/08/2008
by John Kabateck, NFIB/California Executive Director
California's business community has consistently stood united when government has sought to raise taxes and increase regulatory burdens on those responsible for keeping our economy strong and protecting jobs. Remarkably, this solidarity does not apply to the protection of small businesses from government abuse of eminent domain by seizing small businesses in favor of big-box retailers that promise more money for city coffers.
How can California's business community stand united against higher taxes and government intrusions in the marketplace, yet turn on each other when government seeks wholesale acquisition of private property through eminent domain?
The answer was really evident at a recent town hall meeting in Baldwin Park, a suburb of Southern California, where local homeowners and small business owners organized opposition to efforts by city leaders to bulldoze over 500 modest homes and vibrant small businesses in an area of approximately 125 football fields to make room for a major retail center, a hotel and luxury residential units.
At this meeting sponsored by the National Federation of Independent Business, Ken Woods, a small business owner who repairs sewing machines and does custom embroidery, lamented that using eminent domain for private purposes "doesn't sound American to me," and he is right. How can hard-working Americans who willingly assume the risk of being entrepreneurs lose their businesses to elected officials that believe government, and not the marketplace, should determine who should be in business and who should not? Unfortunately for Ken, paying his taxes and playing by the rules was not enough. He now stands to lose his business to eminent domain for the second time!
Whether this relationship and practice continues will be up to voters this June. NFIB/California, which represents over 22,000 California small business owners, supports Proposition 98, the only property rights reform measure that prohibits government from seizing property to benefit large private developers and businesses. Prop 98 is the only measure on the June ballot that includes protections for homes, small businesses and places of worship. In contrast, Proposition 99 provides no protections for small businesses that are particularly vulnerable to deep-pocket developers who make grandiose promises of more tax revenue to local government.
Prop 98 treats all private property equally. Anyone who believes this is exclusively a small business problem should consider a couple of cases that demonstrate large businesses can be victimized by eminent domain, as well. California's overly-broad eminent domain laws allow government to seize any property or business -- big or small. The City of Hercules (in Contra Costa County) sought to stop a proposed Wal-Mart Supercenter by seizing its land, and the Sacramento Municipal Utility District (SMUD) tried to seize PG&E by eminent domain, as well -- indeed, big companies both listed on the New York Stock Exchange.
This is good reason enough for California's business community to stand together, rather than allow opponents of true private property rights to divide and conquer California's business community one business at a time. By voting "YES" on Proposition 98, Californians will ensure that a free, diverse and competitive marketplace -- and not our self-serving government leaders -- will determine a business's future livelihood and success.
